Richmond area home sales increase- will it last?

By Matt Butner - bio | email

RICHMOND, VA (WWBT) - Home sales are up in metro Richmond, but the numbers only tell part of the story.

The numbers are encouraging- 2nd quarter home sales in metro Richmond are up 23% from 2nd quarter 2009. Henrico saw the biggest jump at 28%, while Richmond and Chesterfield were both up 21%.

Experts attribute much of that growth to federal homebuyer tax credits- but the April 30 deadline to cash in on the credit has since passed. The expiration of the credit has returned the market to a familiar position, with plenty of sellers, but fewer buyers.

"I think consumer confidence is low," said Marianne Boylan of Boylan Mortgage Services.

Boylan foresees a dip in her business following the tax credit-fueled spike. Continued high unemployment and an unsettled mortgage industry have scared away many potential home buyers.

"Until those components get settled down, it could be 2012 before we even feel that we can take a little breather and start over," Boylan said.

Most experts agree that a true recovery in the housing market will start with one word- confidence.

"The consumers, they still need to have the confidence to be able to move up and buy the larger house, or to move around- we do not see that return of consumer confidence yet," said Karen Tilson Smith, President of the Richmond Association of Realtors, who released the report.

The report does cite one reason for hope in metro Richmond- the job market is showing some signs of returning to normal in the area. That could help provide the confidence boost buyers need.

Copyright 2010 WWBT NBC12. All rights reserved.